Fetal cocaine exposure has been reported to have effects on newborn neurobehavior, sleep and state regulation, and EEG patterns. Early mother-infant interactions have also been shown to be disrupted among drug exposed dyads. The purpose of this study was to investigate central nervous system development in infants exposed to cocaine in utero and the contribution of variation in maternal interactions to this development. Both cardiac and electroencephalographic indices of CNS development were assessed at conceptional ages of 40, 48, and 56 weeks. Mother-infant interactions were observed at 48 and 56 weeks. Mothers and their infants were recruited from area full-term newborn nurseries based on toxicology and self reports of cocaine use during pregnancy. Newborns were tested for cardiac reactivity to an auditory stimulus while still in the nursery. Infant cardiac and sleep EEG were then assessed at the ARC at the specified follow-up ages. Mother-infant interactions were videotaped during a face-to-face play interaction and during a feeding. Additional assessments of infant reactivity and temperament as well as maternal psychopathology were collected by maternal questionnaire. Analyses of the newborn data revealed that the cocaine-exposed responded with slower habituation of behavioral responses and greater heart rate increase to the first auditory stimulus presentation, while the non-exposed responded with greater decrease and more rapid behavioral habituation. The cocaine-exposed cried more often, experienced more state changes, had shorter intervals of continuous sleep, and exhibited evidence of autonomic instability. These findings support previous studies suggesting poorer habituation among cocaine-exposed neonates and provide new evidence of altered autonomic reactivity to environmental stimuli during the newborn period. Spectral and visual analyses of the EEG recordings collected at follow-up visits revealed expected patterns of trace alternant at 40 weeks, sleep spindles at 48 and 56 weeks, and well developed sleep state organization in both groups. Sleep state heart rate and vagal tone did not differ between groups at any age. Mothers of cocaine exposed infants tended (p =.09) to rate their 56 week infants as more irritable and easily frustrated. During 48 week face-to-face interactions cocaine-exposed infants vocalized more than non-exposed. Mothers of cocaine-exposed used more infantized behaviors and responded more contingently to their infants than control mothers at 56 weeks. Overall interaction ratings at 56 weeks tended to be higher for the cocaine mothers.